Levy of GST—  In the instant case, the appellant sought an Advance Ruling on the question of classification and rate of GST on various receipts received by the applicant on the count of distribution of electricity.

On perusal of Notification No.12/2017-Central Tax (Rate) dated 28th June, the Authority observed that intra state transmission or distribution of electricity by an electric transmission or distribution utility is covered under service code 9969 and attracts GST @ “nil”.

However, on the issue of the other services rendered during the course of transmission or distribution of electricity by the applicant, both the authorities held divergent views.

Lower authority find that the issue is squarely covered by Board's Circular 34/8/2018-GST dated 01.03.2018, para 4 of which fully exempts Service by way of transmission or distribution of electricity by an electricity transmission or distribution utility. However, it has also specifically excluded from this exemption, certain other ancillary services which are not directly or closely related to the said service. 

Held that— The Ruling of AAR is modified to the following extent-

(i) In addition to services listed in serial nos. 1, 2, 12, 14 &18, six other services listed at serial nos. 3, 10,13,17 and 21 (being directly or closely related to the main service of distribution of electricity) and serial no.16 (mandatory requirement for obtaining electricity), are also fully exempt from GST.

(ii) All other services as enumerated at serial nos. 4 to 9, 11, 15, 19, 20 and 22 of the Table-I above are ancillary in nature which are provided at specific request of the consumer and are not a compulsory service closely or directly related to generation or distribution of electricity. Hence, these services are leviable to GST at the prevailing rate of 18%.